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tv   Fast Money  CNBC  December 14, 2015 5:00pm-6:01pm EST

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melissa, what's on tap? >> we're going to play tonight, kelly. we have the chief play officer of toys r us joining us with some of the hottest holiday gifts around. >> is it the big keyboard you can dance on? >> no or is that so 1980s? >> i'm so not going to tell you. >> i think it should be a hot item every year. and hoverboards. we'll see if they make the cut. >> thanks, kelly. "fast money" starts. right now live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. the traders are pete najarian, david seeberg, dave grasso and guy adami. what the breakdown in junk bonds means for the most important fed meeting in more than nine years. and how you can protect yourself from the carnage. what is behind the retail route and whether names are worth a look right now. later, the streak takes aim at apple but is selling about to get much worse? we've got the shocking chart that has apple shareholders running for exits. but first, we start with the sell-off sweeping the high-yield debt market in the u.s.
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hitting new lows today. and this as stocks close at the highs. with the dow up 103 points. but the unwind in high yield started in 2014 with the markets hitting new market highs after that. so what is high yield actually telling us about stocks right now? guy? >> i don't think it's telling you anything about the stock market necessarily. i think people will make that jump and say it's got to be bearish for stocks. and to a certain extent, that is true. but you know what? the transports didn't really tell you anything about stocks last november when they started to breakdown. neither did the russell. and to a large extent, the bond market the same thing. so i think the recovery day in the market was really interesting. i think it closed right in important tech level. 2020 we mentioned last week. and i think the next 35 to 40 points in the s&p is going to be higher. because i think that's where the pain trade circumstances so how come we're hearing high yield, high yield, high yield, all day long. all on friday, record volumes. what is the big deal then? >> everything has a action and a reaction. i do think that it means that
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the equity market should go lower. this is a retracement level. so looking at a chart of the s&p. 2021 to guy's point. that's the level we should bounce to. that's what we did. we bounced from the level 1993 ish and the s&p cash. i don't think we're out of the woods yet. but fed could have a sell the news event but it could pop the markets even further. >> okay. are we in a period where these traditional indicators, whether they be transports or high yield, they are no longer caters for this market period? >> i don't think so. we've been in that period for lang period of time. when you look back in the last year, the last three years, rallies on late volume, volume not confirming rallies or sell-offs for that matter. i really think we're in a different phase right now. when you look at the sell-off in high yield, a lot of it has to do with fear about liquidity. the dealers have their spreads really wide here there is really no incremental buy right now especially in front of the fed. i look at it as a liquidity fear that is sending shockwaves into other sec, to ie health care.
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the highest leveraged companies are being sold right now. that's a fact ahead of the fed. it's probably a buying opportunity in certain sectors, except for energy. energy you stay away from. >> it is interesting as an exercise out there to look through what high yield actually has in it. if you take a look at the hyg, for instance, the biggest sector is communications. it's also health care. a lot of consumer stocks in there. much less so, less so than you would think i think energy in metal. >> i think the one concern i would have is this heavy pressure. you guys talked about liquidity. i think that's the biggest advantage that people are trying to take advantage of right now. where there is a lack of liquidity, that's where the pressure gets put on. hyg a great example of that. on friday we watched the volumes start to accelerate in december. friday's numbers 54 million shares of the hyg trading. today 35 million shares, again, trading. a lot of particular in this particular name. that's something we all have to be very conscious of. what was really interesting today in trade, at 30 minutes before the close, the spider calls that we were seeing come
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in and the buying in there. it wasn't just small. it wasn't way out of the money calls. they were going actually in the money on the spider december, 199 strike calls and aggressively buying 11,500 of those, $4.32. another 19,000 of them in a single block at $4.34. these are millions and millions of dollars flowing into the spiders. and you saw that move at the end of the day. about 10, 11 points on the s&p in the last 30 minutes or so. >> so interpret that for me. you're seeing a lot of bullish activity going into the close at the very end ahead of the fed meeting. >> yep. >> what do you make of that? >> what i make of it is it is because of the fed meeting. the reason i say that is when you're really looking at what is going on in the market, everything is short-term. those are december options. those are going to expire friday. so no one really wants to commit in the long-term right now. and i think that's exactly what this market. you guys were talking about leadership. we haven't really had leadership all year. we've had rotations of leadership throughout the year. >> right. >> so one day we're talk about energy. the next day financials and health care. >> this is the biggest options
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exploration in years that we're going to see on friday. if yellin had any guts, she would not raise rates and rip off the band-aid. the market comes in. if they say she is going to have a dovish rate rise. >> yeah? >> you're going see the market rally, but ultimately it's going to get to the same spot as we would get if she did not raise rates. ultimately, it's a sell no matter what she does. >> okay. >> i think you bring up a very good point. bringing up the expiration, the fact that it's going to roll off in the spx. confusion is going to enter the market in one direction or another. whether or not do we move on rates or don't move on rates, the first move could be a very confusing move. and people may react thinking that, that's the correct move. when i tell you, the way it's set up for the morning when we expire, you could have a down move in the market. but there could be an underlying bid that actually coming in to support it. so i wouldn't react to the first move in the market, suggesting that that is determinant. >> this sounds like a
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treacherous week. and then you lay on the high yield market and the concerns there. >> treacherous is one word for it. pete will take the other side of the word and say there is huge opportunities with a week like this. i'll say this. i thought the pain trade in oil has been lower. that's proven to be correct. i still think the pain trade in the s&p is going to be higher. and i think it could manifest itself in a fed that comes out, rate hikes, quarter points says i'll see you december 2016. the market takes that as an all clear for the next 11 months, and off we go. how high is an interesting question. but i think the pain trade for the rest of the week could be higher in the s&p. >> high yield fears rippling through the market. that's has commodities making some changes. dennis gartman joins us now from venice beach. good to see you. >> good to be seen. >> is what is going on in the high yield market, we were having a debate earlier here how it may not be any longer any indicator for the equity markets. >> i think it's an indicator of confusion more than anything else. markets like to be unconfused.
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markets like certainty. markets abhor confusion. and i think what has happened in third avenue is a confusing circumstance that is going to send people such as myself to the sidelines. it is such a period of time when you don't mow what is going to happen. you don't know how much worse it could be. maybe this goes away in the course of a week. but i always like to say, there is never just one cockroach. there seems to be another shoe that falls to keep the cliches coming forward. this bothers me. so i think the sidelinesis a very good place to be. we're breaks trend lines not just here in the united states, but we've broken trend lines in europe, across the board. the german stock market has broken its upward slope. the british stock market has broken its upward slope. the japanese stock market has broken its up upward slope. neutral to the end of the year and ahead of the fed's meeting. >> what my pushback would be, you talked about certainty in the markets.
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when is there ever certainty in the markets? i would say the answer is probably never. >> never. i mean, there is never certainty. there is just greater degrees of uncertainty. and right now given the fed, given what is happening in high yield, given the trend lines that are being broken, it's a measurement to me of more uncertainty than normal. but you're absolutely right there. is never a great degree of certainty. we always climb walls of worry or we fall off the wall, one of the two. >> dennis, as i understand it, you moved to the sidelines with a negative bias, meaning potentially as early as tomorrow, you could be net short? >> well, i doubt that i'll be net short. but i'll certainly put into place some hedges to make certain that i'm as close to neutral as possible. it's still a bull market. and as i've always said, in a bull market, there is only three positions that one can have. really long, pleasantly long, or neutral. i think neutral is the right place to be. it will take much -- it will take quite a good deal of weakness to get me to turn
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overtly manifestly officially bearish of stocks. it's still a bull market, but neutrality i think is the right place to be. >> tell me what you think is going to happen with oil after hitting near 11-year lows today, dennis? >> you know, it was interesting. oil was interesting today. the term structure continues to widen. everything that tells me that has kept me to be bearish of crude oil for a listening period of time. today was interesting because you had almost -- you didn't quite finish it. but you almost had an outside reversal day. you went to new lows. you closed higher on the day. if we had just taken out the previous day's highs, i would be willing to say maybe today was the low. maybe today was the low. i'm not ready to put money at risk on that instance. but it's fascinating to me that you made a new low, closed higher on the day amidst overt despair in the energy market. so maybe, maybe we've seen the low. watch the term structure. >> right. >> if the front months starts to gain on the preferred, then you can start to make the case that maybe we saw the low. maybe. >> okay. dennis, thank you.
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>> thanks much, mel. >> dennis gartman of the gartman letter. did we see the low in crude? >> i think crude is going to go a little lower. i do believe you listened today to iran, the comments coming out about them coming back to full capacity before the swarngs put on. look, that's 500,000 barrels a day. that's the max. we were not talking about condensate. condensate could be additional 250,000 barrels a day. so supply constraints are here to stay for a very long period of time. i do think crude goes lower. >> lifted the export ban. >> that's where i was going go. that i think was the biggest thing that moved stocks around. if you look at valero, you look at tesoro, they both took a haircut of 5% and 10%. it's negative for the refiners, it's positive and negative for brent. you get a global price of wti. and the refineries kept that supply in the united states. now it's going to go elsewhere.
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it's going to different countries. >> european markets closed. the oil flips around from 34 to 36. the dollar starts moving around. all of this happened around that noon hour. >> yeah. >> really, really interesting. i think the most interesting part was that oil volatility index that we talk about all the time, the ovx head up towards the 57 area. did pull back significantly. but still week, talking about mid-50s anyway. a lot of volatility. i'm with you. i'm not so sure we hit the lows yet. but what i loved seeing today was exxon trading so well. conoco trading so well. some of the big integratives, the way they traded. >> the export ban being lifted. >> right. up next, gopro gets grounded as morgan stanley slaps a price on the stock. is a buyout the only answer? plus an until trouble as the stock falls. we have the shocking chart that shows the selling is just to be begin for america's most loved stock. we'll explain. and later, it's the one area of the market is that is getting hit hard on high yield concerns. we'll tell you what that is and if the contagion is about to
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spread even further. more "fast money" right after this.
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welcome back to "fast money." a couple of different shareholder capital return plans to tell you about, melissa and guys. first of let's start with
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boeing. boeing announced it's going to boost its quarterly dividend by 20% to $1.09 per share. again, 20% to $1.09 a share for boeing's new dividend. they also said they're going to reauthorize a $14 billion stock repurchase program. that's going replace the existing $12 billion authorization that was approved last december. about 5 1/4 billion was left on that prior authorization. so a new $14 billion program starting off there for boeing. you can see the shares are up in the after hours. pfizer saying it's going to boost its dividend by 7%. again, 7% boost with pfizer's overall dividend. it will now be 30 cents a share quarterly from a prior 28 cents per share. two large cap dow components, boeing and pfizer, both boosting their dividend. bowing in this case also adding $14 billion to its stock buyback program. back to you. >> thanks very much. take a look at boeing. trading higher.
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the yelled is already more than 2 1/2%. >> approximately 3%. it's up 10% year to date. so they have a lot of international exposure. so the counterintuitive nature of a rate rise would be that the dollar comes in. everyone thinks that's such an overdone trade right now. if that dollar comes in, i think you could see some capital appreciation and you're paid as your capital appreciation. >> so you think people are going to sell the news on the dollar. >> exactly. >> guy? pfizer. >> pfizer, we have liked it for a while. dan nathan of all people have been positive. >> of all people. >> he talks about it all the time. >> positive on something. >> positive. >> he is largely not a positive man. >> you know what? let's -- >> truth. >> he is very smart. >> very smart. >> there are two dan nathans? [ laughter ] >> go ahead. >> i think fiez sorry reasonable valuation. they have a lot in their pipeline. the stock was languishing at 33 bucks. this might be the catalyst to take it higher. another wild day for go pro
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after the stock hit an all-time low. shares well 10% after morgan stanley downgraded the stock to underweight. slashed the price to 12 dollars siting inventory issues. i feel like every day there is another analyst on the street getting increasingly negative on this one. >> finally. where have they been, for crying out loud. this is a sthook is a hardware company. should it be valued like a hardware company. apple the trading ten times multiple of next year's earnings. this is trading at 14 times next year's ratings. i look at the bullish call on go pro. why would anybody want to own the stock to begin with. it wasn't necessarily just this product. it was about the eco. it was developing a company that surrounded the ecosystem from a content perspective and being able to deliver that content to its user base. they failed on that dramatically. there is no growth manager in the world that is willing to pay a growth premium for this story right now. it is a single device that is -- i don't use the word easily replicated. but will be.
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you've got samsung that basically allows you to put their phone in a sleeve and go out and do is the sim t same act things. this stock should be trading at $12 there is no reason to buy it. >> i am maybe for the first time defend the company in some respects in that i feel like it was investors who wanted to believe there is more to the gopro story than being a commodity maker. it was investors believe they could become a media content system of some sort. people ate that story up hand over fist. >> it was the media content and the idea they would have new product lines coming out that would be better and greater and all the rest, very much like apple's system. by mispricing and mismanaging the recent one, that really is what is hurting go pro right now. we talked about international expansion. they haven't been able to do either of those. because of, that when you fail, it's like giving guidance. the second you tell people the guidance is going to be lower, they have no patience in this market. >> the two elements of growth are not there anymore, then you're lights out. >> agreed. next up, it's shaping up to
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be a not so happy holiday season -- is that the cat thing? >> no, the squirrel. >> the squirrel. whatever. small, furry animal. >> in a small little pool to start. then they branch out to a bigger pool. >> maybe they naturally have that ability and we never knew that. shares of bed, bath & beyond, macy'ses parent company hitting lows. the weather can't possibly be helping them at this point. >> clearly not. it's all about product mix. macy's has been a disaster for quite some time. i thought they could turn it around. i still think he can. but the stock is not investable at this moment. maybe it's tradeable. i'll let pete talk about under am armour. the best way to trade this space is with mastercard and visa. both had big days today. i think both are going to press towards their all-time high. a benign tape get mastercard and visa to levels they've never seen before. >> only because you led in with
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that, i'll talk amazon really quick. up over 100%. still owns the retail space. but aeo, american eagle is up 12%. it's bought every dip there is something going on here. it's a little fishy. i think something is going on. i don't know if it's an m&a activity, but it's acting way too well. >> you like under armour still? >> i do. but when you're talking about the retail space right now, i know i always bring up tjx, how about ross, burlington. it's inventory turnover. the big guys aren't able to do that. when you're talking about macy's, pvh, they can't turn it over as fast. the problem is they're loaded with inventory. now they have to discontinue and get rid of it. and they're trying to move to next as well as online. online is eating up macy's. dom? >> we know that carl icahn is involved in a lot of different stocks. he wants to change. this time we're talking about carl icahn boosting his stake in
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xerox to 8.13% via a regulatory filing. carl icahn boosting his stock to xerox to 8.13%. it was 7.13% prior. so an incremental boost. but still one that is notable here. of course, carl icahn has been taking some notable stakes being boosted to some of these stocks, cheniere energy, now xerox. up fractionally as carl auch cuban boosts his stake. back to you. >> dom, thank you. now when icahn first revealed a stake in xerox, we scratched our heads. i'm going venture to guess, seaburg you're going to continue scratching your head? >> yep, i continue to scratch my head. i stay way from xerox. it's not a flay i would want to be involved in. i look at the past six plays he has been active in. they have been pretty much dead
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wrong. >> so don't follow in. >> don't follow in. the sell-off sweeping the high-yield debt market. and it's not just energy. two of the top high holdings, hyg are hospital stocks got crushed today. a top analyst weighs in on just how worried we should be. i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide. in the meantime, here is what else is coming up on "fast." tech darling or tech nightmare? is apple, america's most beloved stock about to see major selling? it's the shocking chart that stockholders need to see now. the cash cow that is "star wars." from the film to the merchandise and the theme parks, are investors trading disney at a serious discount? we'll explain when "fast money" returns. " isa real thing? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund.
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welcome back to "fast money." some interesting news on the retail front. this as dow jones is reporting citing sources familiar that hudson's bay is possibly near a deal to buy the online retailer gilt group for around $250 million. hudson's bay may be near a deal to buy gilt group for around $250 million. hudson's bay, the plan according to people familiar would be to
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combine gilt groupe which is a daily deals seem with the saks off fifth business. hudson's bay is the parent company of saks fifth avenue. as well as lord & taylor. interesting news on the retail front here possibly with saks, at least the saks off 5th off price concept combining with gilt groupe. again, this is all according to dow jones sources citing. an interesting development here possibly on the retail side of things. back over the you guys. >> thank you, dom. gilt groupe is an online flash sale. but it's more high-ends good. this matches up with the saks off 5th. it has a dedicated membership base. you guys are i don't know what gilt is. >> i think it's a great deal. nobody should be thinking they're competing with amazon at all. but this is actually a smart move for them. to trouble in tech land. apple shares under pressure
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after channel checks on the street. barclays, morgan stanley all trimming estimates. our last guest sounded the alarm on apple just last month saying it's time to sale. breaking it all down at the smart board, carter, what do you see? >> it's not getting better. or as the old time technical saying goes it doesn't act well. the nasdaq is down about 6% yet apple is down almost 16%. so what i see, anyway is this. a well defined trend, yes. and clearly a break in trend. we have finally sort of succumbed. now you can draw the lines that way. or you can draw them this way. we put our trend line in, we have a break in trend. we have something of head and shoulders top. and then the long-term, i mean, a break of the neckline here would imply today's close around 112 to about 100. but then the long-term chart is also something to be aware of. we have just now started to break the trend line.
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it's been in effect for the past many years. we're now below trend on the long-term. we have breaking here. we have head and shoulders top. sell. >> what would make you get more constructive on apple? >> well, the first thing that makes anything good is that it's performing. and right now it is underperforming. the nasdaq composite, underperforming the market. and the very fact that it's no longer an uptrend is a problem. so it would be time spent curing, healing, and trying to show me or anyone that it's not in trouble. which it has been in. >> okay, carter, thank you. >> thank you. >> carter worth of cornerstone macro. who is also throwing the towel in on apple. pete, are you? >> i'm not throwing the towel, no. the chart is absolutely beautiful. and if it follows the chart, then we've got a little bit of a problem here. when i look at the stock -- >> your favorite analyst katie huberty came out negative.
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>> they're worried about credit. we're not worried about apple. what the world is worried about. >> 200 billion. >> exactly. >> so right now 110. and i agree with everything that carter just pointed out in that chart. i'm long it. but 110 has been some soft support. so if you look at an ad you go with him number around par, 100. but 102, 108 is a buy for anning. >> my view is if you look at the revenues or sales last year, in 66% of their sales came from the iphone. are we going to be ape to replicate that going forward with the wearables technology or the cloud business? >> no, but with the next iphone you will. this iphone wasn't a big enough change. it didn't make me upgrade. it didn't have that massive upgrade cycle. the next one i think that have that pent-up demand, you'll see that. >> but it's not going to drive revenues for them. that's problem. you think about the margin on the iphone, the marvin on the watch, completely different. it's like night and day. i don't see apple making a meaningful move to the upside at all. as far as going a lot lower, they had so much cash on hand.
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the best thing an occasional do right now, and i'll say it. it's kind of ridiculous. they have to gout and buy some sort of player that is going to allow them to come to the enterprise. they own the consumer. microsoft, they own the enterprise. they have to figure out how to get involved in that play. >> the ripple effect of the call obviously is a lot of suppliers fell very sharply. skyworks solution. >> let's go down a couple more. qualcomm not such a big deal. a four-year low pushing towards levels we last saw in 2011. they said they're probably not going break up the company. that clearly didn't help the stock. but at a certain point, and we have cautioned to be in this thing. we're getting close, you wonder if you get more activist chatter. you wonder if you get some positive catalyst. it's coming at some point. i don't know where it is. but against 45 bucks, which is close, you might be able to own this stock for a trade. still ahead, as the dominoes continue to fall in high yield credit, we're taking a look at closer look at the stress beyond the energy sector. hospital stocks getting whacked today.
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is the credit market signaling distress on the equity side? much more "fast money" right after this.
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welcome back to "fast money." the s&p 500, dow and nasdaq all closing at the highs of this day after dipping in and out of positive territory for most of the session. crude oil briefly fell below $35 a barrel before staging a stunning reversal, rallying nearly 2% and snapping a six-day losing streak. here is what is coming up in the second half of "fast money." disney's long-awaited "star wars" movie comes out later this week. why the box office frenzy could spell out of the world returns for this stock. plus, a special delivery. it's one of the busiest days for ups and fedex. you won't believe how high some trade sears those stocks going. we've got the trade. but first, let's start off with the tock on the street, and that would be high yield bonds. falling energy prices aren't the only problem. dom chu is in the newsroom with the story. >> let's talk about one of the etfs, the big one that tracks this is the hyg, the i box, the
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ticker hyg. it's worth reiterating again. the orange line is the corporate bond investment grade etf. and the white line is junk bonds or the high yield. you can see the big divergence over the last month or so and that has a lot of traders worried. take a look at some of the composition of these particular funds. the reason why it's important is for a lot of the distressed funds or high yield funds throughout, they may be going more on the speculative grade of the spectrum. this particular etf has 90% of the portfolio with a credit rating of b or better. that's the second best if you will approximately in noninvestment grade rating. 50% of the fund is in bb, which is the highest junk bond rating. and 10% of the portfolio is in this really speculative ccc or below. that's composition. if you take a look at the overall sectors represented, yes, energy is important. it's a bigger part of it. it's about 11%. but about half of the funds'
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holdses are in telecommunications bonds, also consumer-related issues as well. energy, yes, it's 10, 11%. but it's not the bulk of what happens in these funds. also want to point out some of the issuers that make up the top part of the holdings. hospital corporation of america, one of the big hospital operators. one of the biggest issuer waits in this index, about 2 1/2%. t-mobile, ally financial and frontier as well. it's worth talk about. hca, tenet health care, a couple of the big hospital stocks that took big hits in trading today because some traders and investors feel as though their reliance on some part of the high yield junk market may prove to be a little worrisome down the line. as a result, you can see names like hca, tenet health care taking a big hits in recent trading, melissa. back over to you guys. >> thank you, dom. as dom had mentioned here, hospital stocks make up a number of the high yield etf top holdings. those stocks getting hit across the board. all under pressure on the back
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of the high yield meltdown. will these health care names recover? the director of raymond james research is on the fast line. great to have you with us. >> thank you. >> is there any concern in your mind that these companies will not be able to pay their debt? >> i think you have to separate tenet and community from hca. tenet and community are leveraged big times. hca is leveraged about four times. if you look at hca's debt maturities, the fact that they're spending $2 billion a year buying their stock back, there is plenty of cushion there for them. and even if bond market got a little hinky, they could turn to the bank market and finance more. hca just priced a note last week at under 6%. i think if you look at community, it's leveraged about six times. they've really had no organic growth in 2011. they're spinning out an asset called your quorum. at the very least, could be a
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lot more expensive than people are thinking. this happened to team health for example when they tried to buy icm. they got jammed by the credit market. i think tenet and community are in a different boat with their capital structure. community really being the only one with a big need for capital in the next three months or so. >> and as far as community and tenet, because you seem to be most concerned about them, is their cash flow not enough to support their debt levels? >> you know, i think when you get to six times, you can run at that level, but clearly your cushion is less. these companies have to spend 5% of revenue become on their plant historically. i think it does raise -- you have less cushion for anything to go wrong. there is no issue today. community health is, you know, about 2.9 billion of ebit a. there is room. today was maybe the crescendo. one thing i want to point out in community, it takes $30 a share
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to equal one turn of ebita. these stocks have traded at six times 40 before. >> sure. >> so the bears say well, gosh, in some snare there is no equity value there. it's so leveraged relative to their capital structure. it doesn't take -- i know a $2 move. >> so you mentioned you thought the selling of the stock mace have hit a crescendo today which would indicate to me reading between the lines this may indicate a bottom or the selling has hit its worst levels. are you concerned within your coverage universe what is going on in the high yield market and the flight to the exits will in fact push around the equities that you cover? >> oh, sure. like i said, that's been going on all year. i think all this really happened with hospitals is they got some artificial growth from ata and now we're settling back into an average 2 to 5% organic growth scenario. and the multiples have retraced all of the flow from the ata.
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i don't think it's armageddon in a relatively low rate environment. i think in the margin what it means is it's going to be a little more expensive to finance their balance sheets. and that's just pouring some gas on the fire with respect to multipishlgs john, thanks so much for phoning in. i appreciate it. >> thank you. >> john ransom of raymond james. what do you think of the action? >> look, they're going to probably get to a point where they're a trade. they're not there yet. i don't like the hospital structurally. enrollments are declining. this is a group you stay away from in health care. but they could be setting up for trade. >> tenet health care has now probably 17% short interest. valuations allows the quarter. cut in half since its zeineth earlier this year. i'm with david in terms of more pain ahead. but, but, but, but, if the hyg if it can recapture 81.5, maybe it will scare some shorts out. and tenet health care is worth a buy. >> put buying was off the
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charts. 600,000 puts. looking out to january, going to the 77 puts, but you look at the hyg, 81,000 calls versus that 600,000. that saez lot. anyone with leverage, they're coming after them. still ahead, will the "star wars" franchise be disney's new cash cow? why investigators may be trading disney at a discount, right after the break. plus, it's not just the "star wars" holiday. an inside look at this year's hottest selling toys coming up later this hour. much more "fast money" straight ahead. now more than ever america's electricity comes from cleaner- burning natural gas. and no one produces more of it than exxonmobil. helping dramatically reduce u.s. emissions. because turning on the lights... isn't as simple as just flipping a switch. energy lives here.
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shares of disney falling nearly 4% over the last month. but if the box office frenzy over "star wars" is any indication it could help boost the stock into the stratosphere. andy has been crunching some numbers. always good to see you. >> good to see you. >> you have a conservative estimate and a reasonable estimate. >> yeah. so let's take a look at this thing. when disney bought "star wars" two years ago for $4 billion, a lot of people were uncertain of that. it was long in the tooth. they weren't buying the whole catalog. now people are a lot more excited. let's do the math a little bit. if they make $4 billion on that $4 billion, double it in ten years, the rule of 7s, a 7%
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annual return, right? i think they're going to make more like $10 billion, which would be a 13% annual return on this investment. and here is why. thing movie going to do almost $2 billion. they've got two more in the pipeline. so that gets you to 6 very, very quickly. well, let's say 4 or 5 to 6. that doesn't include any of the merchandising, any of the video games. and you know, no company puts their intellectual property across platforms like disney, right? they're the best on the planet at that. >> does it matter if the film is good or not good? >> you know, it sort of does, and i'll tell you why. the last couple were good, but they weren't great. and i think these movies, they do have to be great to make $2 billion. >> okay. >> $2 billion for "avatar." >> for the next two. >> it doesn't matter. >> $2 billion is what "avatar" did and "titanic" that is the stratosphere. that is the very top and this is not inflation adjusted. when you make the best movies, they get to that level. i think you're right. the franchise to really keep it having legs like that, they have to make things that are great.
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this is disney. lucas is still there. i think they've got a real shot at this. >> is this enough to offsaid the cord cutting concerns? >> that's a great question. circumstances this the force that can help them? >> it's certainly going a long way. good one. very good. you got to have a couple of light sabres. so i think it goes a long way. and here is why. if you look at what is going on at espn, they lost 7 million subscribers going from 99 to 92 over the past two years, times $6.506 million a year in revenue that espn is lacking over the past 24 months. that's big. but then you start to plug in these numbers, and you can see why bob iger is happy about maybe this fills the gap. maybe they need another leg besides "star wars." i have no idea what is going to happen with cord cutting and espn. but it's a big problem for this company, right? >> you just bought disney. >> i've been in and out of disney.
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you said is it enough to compensate for the core cutting. disney has been in a trading range went from 120 down to 97, try to ratchet back up. it is trade for me but i believe in the long-term prospects. what does this do to the amusement parks? when you start to talk about what new rides, what kind of draw, how many billions did it make off amusement parks. i mean, it's huge. so i'm not particularly worried about espn. >> right. >> i'm holding it right now and i'll buy a little more if it ratchets down again. >> i wonder over time, as we start to see some of the numbers come in for espn, even with the cord cutting, are they in a position to raise price? >> yeah. >> because i find of feel as if they are based on what their numbers are and what people are doing watching sports on television. >> the leagues are still charging them a lot of money. and that's got to stop at some point. and one last thing about espn that is different from the other properties, they don't own that ip, the intellectual properties to drive it across the platforms, right, in the way they deal with "frozen" and "star wars." so that is a lot more valuable.
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>> what is your trade? >> i think disney is a trade. i think you can trade the stock. >> you think it's still in the range? >> yeah, i think it's in the trading range. i think it's going to remain in that range future a very long period of time. i'm a buyer as we get closer to 100, 105. and look to sell in any sort of appreciation. but i think this fills a gap for them, but it's not a long-term solution. >> yeah, that's probably right. >> andy, thank you. andy serwar. it's not just "star wars." we will tell you who is winning the battle future this year's hottest holiday toy. after the break, the chief officer of play at toys r us canada tells us what they're expecting to fly off the shelves. he is a short guy by the way, the chief officer. you're watching "fast money" on cnbc, first in business worldwide.
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welcome back to "fast money." it's the holidays. so what are some of the hottest gifts on deck and who has the inside scoop on what the big sellers will be? toys r us canada, since 2013 the company has employed alex thorne since, the chief play officer, probably the best job in the whole world for a 13-year-old kid. he joins us now with a few of the holiday's hottest items. alex, great to have you with us. >> thank you. >> how did you get this job? >> well, i got this cpo job,
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right, there is a word for it. some to do with c, like ceo. but it was contest. i submitted a video how i would make a good chief play officer and then there was an interview like a job interview. and we did a mock interview, interview. and then i got the job. >> wow. but you're retiring at the ripe old age of 13. >> yes. >> so this is your last holiday season. >> yeah. my back is killing me! >> all right. well, then, let's get right to it. so these are system of the hottest toys. >> yes. >> let's start off here. >> all right. these are some of the toys on the holiday hot toy list. and these are some for both toys r us canada, because i live in canada. i live in toronto. and the american hot toy list. >> what is that? >> this is the "star wars" blade builders. we showed this off before the break. and basically you get to build your own light saber. so you can remove the piece. >> wow. >> and put them on somewhere else to customize your own light
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saber. and of course it lights up. because it's a light saber. >> that's pretty awesome. >> light is in its name. >> and it's still going. >> yeah. >> how about this guy in the middle? >> this is the clever-keet. >> like parakeet? >> yes. like parakeet. when you first get him, you get to name him. i named him alex. >> of course. after yourself. >> a spur of inspiration. >> what does he do? he sits there? >> no, there is a card. we don't have the cart. but he drives a little cart. then he also has this food dish that he can feed from. and he has this pole. and he can repeat things. yeah, look. hello, cp 0, yay! >> hello, cpo yay! >> and he repeats it. >> wow. that's a clever parakeet. >> it's a cleverkeet.
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>> now the last is zummar kitty whis centke whiskers. >> this might be a little difficult to demo on the table. but look, he can follow the ball. like he actually cease it. >> does it need more space. >> depends on what we do. i'm going to put it in pounce mode, which is like angry mode. and it's going to pounce. pounce! it sees the ball and it pounces. and basically, just acts like a real cat. it feels when you touch its whiskers and its head. so it's good for maybe you have someone in your family who is i allergic to cats but you want a cat, this is a good toy for you. >> that's excellent. alex, thanks for coming by with all the toys. alex thorne, the chief play officer at toys r us canada. pete najarian, what would you like for christmas? >> i like the light saber. i think that's fantastic. the light saber looks awesome. wow, i'm getting atacked. there he is. >> whoa, whoa!
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>> let's interweave the "star wars" thing. so hasbro up 25%. they continue their agreement with "star wars" for the games. so there is lego there is hasbro. you trade with hasbro. mattel is negative on the year. hasbro is positive. >> i think the cat is pretty cool. from holiday toys to holiday shipments mike khouw in austin with the trade. >> these guys are starting to show up on a lot of door steps. there was a lot of options activity. fedex was seeing double their options daily volume because they're going to be reporting earnings this wednesday. ups, though, which has already reported, was also seeing above average volume. and what was interesting there is we were seeing some bullish activity, despite the fact that they have actually said that they've been struggling with some of the holiday shipments. and what they were doing is buying the april 100 calls they were paying just about $3.50 for those. the bets they were making when the stock was around $97 is the stock could be up more than 6% about four months away. >> thanks, mike.
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for more "options action" check out the show 5:30 eastern time on friday. >> nice job. >> got a little friend here. i'm allergic to cats by the way. >> they said that thing act likes a real cat. it leaves for two weeks at a time and comes back when it's hungry. that's about right? >> it's pretty cool. >> i love cats. >> okay. up next, the final trade. stay tuned. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.
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time for the final trade. around the horn we go. pete najarian? >> shout out to my daughter. she just told me she absolutely crushed her final. >> yay! >> absolutely. always got to love that merck. i think these stocks are going higher. i like the pharmas. >> seaburg? >> i like the pharma as well. bristol-myers. i like the pipeline here and like the stock. bristol-myers is a buyer. >> shout out to stock. >> my kids failed everything today. disney back on the trade again. >> guy adami? >> that was fantastic. >> a play officer. we play, laughs. >> grasso's kids.
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>> health care, health care. and i'm going to give you pfizer. >> wow. >> which means health care is going to get obliterated tomorrow. >> i'm melissa lee. thanks for watching. see you tomorrow here at 5:00 for more "fast." meantime, "mad money" with jim cramer starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now. hey i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends and i'm trying to make you money. my job is to teach and coach you. call me at 1-800-743-cnbc or tweet me @jimcramer. why does the market seem so bad these days? what makes it seem lousy when


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